This dialog box contains the parameters that indicate how to match records in the beginning-of-period and end-of-period databases and what cost method to use to analyze the gains and losses.

Key field(s) is used to track records from the beginning to the end of the period. Unique keys are required (for example, social security number), but only for the records meeting the selection expressions (if any) in the beginning and end-of-period Valuations. You may specify one or more key fields.

Alt Key is an optional parameter that can be used to specify a secondary key field (or fields). When a matching record cannot be found based on the primary key field, a second check is performed using the alternate key. This can be helpful in situations where Social Security numbers or employee ID numbers are corrected from one year to the next. As an example, consider a current year database with primary key field EEID and alternate key field OLDEEID. When matching EEID in the current year database against the prior year database, a second step will be taken for any for any unmatched records. Those unmatched records in the current year will also have the alternate key field OLDEEID checked for possible matches against EEID in the prior year. 

For Gain/loss basis, you may select either a Funding cost method, an Accounting liability or, in the U.S. qualified pension mode, a PPA target liability.

Funding Cost method indicates an actuarial cost method to be used as the basis of the gain/loss analysis. Because the Gain/Loss Analysis Tool calculates and analyzes only the experience gain/loss (not a gain or loss resulting from a cost method change), you must base the analysis on the “old” (before change) cost method if there has been a change in cost method at the end of the period. Therefore, select the cost method referenced by the Asset & Funding Policy used for the beginning-of-period Valuation Set that produced your beginning-of-year valuation results.

Note that, currently, ProVal does not allow the Gain/Loss Tool to run using any of the attained age actuarial cost methods (i.e., Aggregate Attained Age - % of Salary, Aggregate Attained Age – Level $ and Attained Age - % of Salary). Because these methods are based on the projected unit credit cost (PUC) cost method, we recommend that you use the PUC method in the Gain/Loss Analysis run to determine the components of the actuarial gain or loss.

When an Entry Age Normal cost method is selected in Canadian Pension mode or Universal Pension mode, the application of the average entry age normal technique must be consistently applied or not applied in the valuation assumptions of the underlying valuations.  When applied, the average EAN technique uses an artificial normal cost rate derived from a separate unrelated initial run.  Because of this, the present value of future normal costs is unlikely to equal the present value of future benefits (PVB) at entry, resulting in either positive or negative liabilities associated with new entrants which will appear as a new entrant gain or loss whenever a participant is hired (or otherwise enters the plan) during the gain/loss period.  During a participant's years of active service, the artificial normal cost rate is assumed to remain constant and expected liabilities are based upon this assumption.  To the extent that the normal cost from the separate unrelated initial run changes from the beginning of period to the end of period, the impact of that change will be captured in a separate gain/loss source called "change in average normal cost rate".  Because the artificial normal cost rate, and by extension the present value of future normal costs, is assumed to remain fixed when measuring gains and losses from other sources, the entire change in PVB resulting from each gain/loss source will be reflected as a change in the accrued liability and therefore as a gain or loss.   

To perform a gain/loss analysis on the Accounting liability basis, in the pension modes, you may choose either PBO (Projected Benefit Obligation), ABO (Accumulated Benefit Obligation) or Entry Age Normal (U.S. public mode only) as the liability upon which to base the analysis. In OPEB mode, the APBO (Accumulated Postretirement Benefit Obligation) is the available liability basis.

In the U.S. qualified mode, to perform a gain/loss analysis on a PPA target liability basis, you may choose either “Funding not-at-risk", "Max tax not-at-risk (PUC)”, or “Max tax not-at-risk (UC)” as the basis of the liability for the analysis.

If a cost method of the spread gain type has been selected, then Employer normal cost becomes accessible. You must enter the beginning-of-period benefit normal cost (i.e., if the total normal cost includes an expense normal cost, then enter only the portion of normal cost that provides for benefit liability). In a contributory plan, this amount should be the net normal cost funded by the employer (i.e., net of employee normal cost), not the total plan normal cost. Thus the amount derived does not include the part of normal cost funded by employee contributions.